Transfer of Equity/New Mortgage

TurboT_3

Hi all,

First post here and I would like some advice.

My parents have a mortgage on their property in which my wife and I also live. Sadly my mother passed away at the beginning of the year and now the mortgage is in the sole name of my father. Currently he is paying interest-only but that is due to change come September when the full repayment of his mortgage is due. From then, he won't have the means to repay the mortgage.

The original plan was for my wife and I to purchase the property when we had saved enough for a deposit, but due to my mother's passing and not having yet saved enough for a deposit, we are stuck in a difficult position.

He is aware, that regardless of which avenue we take, he will not make any money and would like to offload the mortgage so to speak as he is nearing retirement age. As for helping him pay the mortgage after September, of course we will help but he doesn't believe in paying for something that you wouldn't see any benefit from, thus we are asking for advice

We are wanting to know the implications of assuming the mortgage from my father. Or would the easiest route be to save more for a deposit and take out a mortgage?


Many thanks

flammable999

TurboT wrote: »

Hi all,

First post here and I would like some advice.

My parents have a mortgage on their property in which my wife and I also live. Sadly my mother passed away at the beginning of the year and now the mortgage is in the sole name of my father. Currently he is paying interest-only but that is due to change come September when the full repayment of his mortgage is due. From then, he won't have the means to repay the mortgage.

The original plan was for my wife and I to purchase the property when we had saved enough for a deposit, but due to my mother's passing and not having yet saved enough for a deposit, we are stuck in a difficult position.

He is aware, that regardless of which avenue we take, he will not make any money and would like to offload the mortgage so to speak as he is nearing retirement age. As for helping him pay the mortgage after September, of course we will help but he doesn't believe in paying for something that you wouldn't see any benefit from, thus we are asking for advice

We are wanting to know the implications of assuming the mortgage from my father. Or would the easiest route be to save more for a deposit and take out a mortgage?


Many thanks

Hiya
You will probably get some more experienced opinions, but I was in a similar situation when I got on the ladder late 2008. There was no way I could have afforded a deposit on my own and so my despoit was gifted from my father whose name it was under previously. As a result, I had 95k despoit already towards the house.
I dont know the complete ins and outs but using whatever your father has paid towards the capital aready as a gifted depsoit is definitely an avenue to consider, especially if hes not too worried about benefiting financially himself.

Conrad

You can buy him out. If he wants to remain living there, lenders will want him to sign a disclaimer waving his rights to the property.

A gifted deposit is usualy allowed where a seller and buyer are blood relatives.

TurboT_3

Conrad wrote: »

You can buy him out. If he wants to remain living there, lenders will want him to sign a disclaimer waving his rights to the property.

A gifted deposit is usualy allowed where a seller and buyer are blood relatives.

cheers...

When you say buy him out, do you mean we take over his payments and legal responsibilities or buy the property via a new mortgage?

Could you please explain the gifted deposit situation please? It is all new to me

Thanks!

getmore4less

Is the plan that you continue to live there with your father and eventualy inherit the house.

Could you look into a joint mortgae and you pay whatever you feel is fare.

He could gift you part of the house now.


Might need some IHT and other tax advice from a pro if the house value/mortgage are large.

VIGILANT22

You're best course of action is to discuss this with a whole of market mortgage adviser........
You can do what is known as a concessionary purchase....which doesnt require a deposit (assuming you meet all criteria)
However as mentioned above you should check out any other implications inc this link...then you're well informed.....

http://www.ageconcern.org.uk/AgeConcern/transfer-of-assets.asp